tv [untitled] February 10, 2011 5:30pm-6:00pm EST
the latest in science technology from the bronx. we've got the future covered. live from moscow this is good to have you with us the top stories now for you egyptian president hosni mubarak refuses to stand down and vows to stay in office until september but some power hold will be transferred to his vice president from art cinema. and russia's president pays a surprise visit to a moscow train station discovering major security lapses in recent terrorist attacks in the capital stepping up transport security. the new acts of us christians fleeing from iraq in fear of escalating sectarian violence eight hundred thousand christians in the country have fled those who remain continue to be targeted by extremist groups. terpenes update for the moment the news continues
in less than thirty minutes from now in the meantime artie's financial guru max kaiser explains how the environment influences the economic system that's the kaiser report next on r.t. . i am max kaiser and this is the kaiser report you know back in seventeen seventy six a couple of things happened america was born plus the publication of wealth of nations you know wealth of nations is the book that the entire meal liberal neo classical economic model is based on and yet there's nothing in the book that accounts for what happens when the natural resources run out upon which the entire global economy is based stacey herbert let's talk about that as well max funny you should say that because i have the twin eco eco disasters and the headline so the first
headline is if you don't think weather is impacting the jobs market look at this because now the ecological devastation is starting to really impact an already fragile economic system and if you look at the chart this is from bank of america merrill lynch and it shows you the annual days off from work in the u.s. because of weather related events and as you see in the last two years there's been a surge the law of diminishing returns to put it in economic terms in other words the continuation of a busted model this post adam smith the in classical economic model is run its course it doesn't work anymore because the resources are running out and the one major economy that escaped the economic disaster. australia that's correct well they are being particularly hit hard by the ecological disasters sweeping the world australia unveils flood recovery
tax through this is from a few weeks ago where we had the flooding disasters which have shut down you know all the coal mining industry there and also quite a bit of cotton a straw it has now unveiled a flood tax on higher earners following a warning from prime minister julia gillard that the delusional costs. five point six billion australian dollars or half a percent of g.d.p. well yeah that's right that's huge floods brought on by what's called ag w. anthropomorphic global warming and now they're paying the cost because there's only so much economic activity you can conduct within the ecological restraint that is australia they're floating out there coal mines so the price of coal skyrocketing there flooding out the wheat crop so the price of wheat a skyrocketing now they've got fires they've got huge fires in australia once again the product of a busted economic model and nobody in the us or the u.k.
the primary anglo-saxon economies want to revisit this model and say it's busted we need a new economic economic model for the world they don't want to go there because they know it would require some actual politicking and we don't have politicians anymore we have corrupt businessmen most of the major economies other than australia we all suffered major economic financial disasters and we have now austerity measures being introduced all over the place and increasing taxes to pay for the banking disaster well australia did escape that however they're introducing this tax but they're also introducing austerity measures in order to pay for the ecological disaster and the housing market which has been not most valuable top out because it's a ponzi scheme like the housing. market in canada which is also based on canadian tar sands it's unsustainable and then you can have the central banks of australia and a central bank in canada saying well we have to keep interest rates low in order to
mitigate the catastrophe of the ecology which of course gives companies who are committing that catastrophe an incentive to commit more catastrophe because their price of funds are artificially kept low so the central bank should be actually defending the right of the ecology to exist to the extent that it can support human life but instead it's been co-opted by the corporations who are leaning on it to keep rates so low as to make their model of anthropomorphic global warming and ecological whole the cost of economic catastrophe viable for the next three months because they only look at the next three months they'll all be wiped out wiped out the populations are all wiped out including the c.e.o.'s who authorized this in the banks now you have half of queensland's sugarcane crop suffer damage so in the last week it's like loan yeah see stright queensland the second most expensive disaster cycling to ever hit queensland now strongly is the third largest export of sugar
cane and ninety percent of it comes from queensland and they're now just assessing the damage but basically. five hundred million of the one billion and sugarcane produced for here as been wiped out they think we've hit peak sugar we've hit peak we we've hit peak or we definitely if it peak water you know that you need water to grow all these crops you need water to do all that tar sands mining and extraction you need water and there's less and less water and of course says the ice sheets melt again due to a g.w. all that fresh water goes into the salt water that's even less water of course there are a lot of people who don't believe in global warming and they'll get angry at about it but there were many people who also didn't believe that the federal reserve bank or central bankers could ever orphy up currencies could ever be bad and they got very angry too with us when we ever mentioned that and they didn't protect themselves and that's fine and you don't need to protect yourself from these so you can go sit in a flood plain if you want but this is where milton friedman you know is said
there's no free lunch and yet he his model has given rise to the biggest free lunch welfare bums in the world the energy companies like exxon and chevron and these other energy companies that the companies like on the monsanto for example that gets a huge subsidy to completely destroy the ability of seeds to reproduce and he is the ultimate free lunch but now we're at the end of the free lunch and nature is saying to the economy of the world it's time to pay the piper is time to pay your bill and people are squawking they don't want to pay the bill but it doesn't mean they're not going to pay the bill they have to pay the bill one way or another well the twin eco eco disasters are also in this headline max russia follows china and using reserve ratios to curtail inflation threat the twin eco eco disaster is number one is the economic disaster caused by the u.s. and that is the u.s. federal reserve plan to buy an additional six hundred billion of treasuries according to joseph stiglitz who is speaking in moscow last week he said that
countries reliant on natural resources face an onslaught of more capital. in order to prevent this russia has had to raise their margin requirements and also because of the disasters that i talked about with the fires that swept through russia in the past year consumer prices have surged five nine point six percent from a year earlier triggered by the worst drought in at least fifteen years grain costs climbed an annual seventy percent last month this is anthropomorphic global currency war a g c w right the us is trying to extricate itself from twenty five years of a busted financial monetary fiscal policy they're trying to export their problems to the rest of the world by flooding the globe with cash so china russia other countries are saying whoa whoa whoa whoa whoa keep we were going to raise our reserve requirements to keep your speculative at the for more of a global currency war crisis from hitting our shores so now we're into world war three it basically is
a currency war and i coined the phrase currency war by the way on this show last year i want to make that clear because there's somebody else of there claiming that they coined that phrase i coined that phrase so you think i'm don't with the poetry of the financial disaster me or some god so know what you me well the two in the eco eco disasters i came up with to go it could disaster what is the goal of this is it again in this next headline j.p. morgan announced today that from now on they will accept physical gold the bully on . this is the sign of gold further we monetization and the global financial monetary system yeah. you'll accept gold bullion now group firstly row because you've got no more room to create feel that fake sold short made good so over contracts you told you welfare of course you'll take gold silver bullion because that's real money and your fake fraud house of the whole graphic. that's raising
margin requirements because you know if you lose your money on a margin call. yeah and it's just currency you know like oh well but if you lose your gold and silver you know it's real money it looks like j.p. morgan in the federal reserve bank and jim they can raise margin requirements to two hundred percent it doesn't change the fact that silver is going to five hundred and j.p. morgan's going to zero that's not going to that's what that's big into the cake and finally i'm told china on track to become a top gold buyer again this is something that we told you would happen we said this would happen the demand is unbelievable the size of the orders is enormous said one senior banker who estimated that china had imported about two hundred tons of gold in three months this is the chinese citizen buying this but in america it's becoming more and more mocked and ridiculed as we've discussed they watch the show in china just like al-jazeera for example is watched outside of the us and could
have told them going world for years was really going on in the middle east is not seen in the us so the americans are unprepared for reality similarly we've been talking about gold and silver but. only those people in china who watch the show religiously have been accumulating gold and silver and will be prepared for the twenty first century people in america will be holding their feet dollars and their big macs and wondering what happened to my country and then finally we have this remarkable headline because the w. word has been used in a most shocking way max rand paul and welfare to is what i'm going to play a little clip for you but i'm not singling out israel i'm a supporter of israel i want to be known as a friend of israel we get on with we can't give money you don't have we can't just war or from our kids' future and give it to countries even if they are friends some people interpret this to mean oh you're not a friend a visual i want to be a friend of israel i think that they're an important ally but i also think that
there per capita income is greater than probably three fourths of the rest of the world should we be giving money to the free money or will fare to a rich nation i don't think so of course that welfare he doesn't quite identify going to israel but that's just a pass through mechanism to back to us corporations like following like raytheon like well the big giant lockheed martin type corporations like sixty billion over the past what two or three decades like when barack. barack and the israel you know they're both playing the u.s. taxpayer for jumps basically well i think that israel and egypt and jordan are fronts for the u.s. corporations seeking welfare payments they pretend that they're you know giant corporations who can stand on their own two feet but in and they they go spreading wars around the world in the name of capitalism and yet they themselves are the
biggest recipients of our democracy and where it happened when it went out what happened in egypt of course the u.s. is like what's that democracy we never heard of it we're not we're not we're not about that that's not us no it's not. consistent with our arse our social welfare scheme for corporate welfare is scheme of course israel being a nuclear arms state it's illegal for them to take aid or as ron paul calls it welfare all right stacy herbert thanks so much for once again gracing us with your presence here on the kaiser report thank you ranks don't go away much more coming your way so stay right there.
i welcome back to the cause or report let's go to new york and talk with investment advisor joshua brown also known as the reformed broker joshua welcome to the kaiser report as a go max good to be back all right josh revolution is sweeping the middle east would a dictator free middle east be bad news for lockheed martin boeing and raytheon shares i think they'll always have their share of reasons to reasons to restock the
military and i also think a dictator for the middle east is probably not in our lifetimes but yeah certainly these companies have gotten tremendous subsidies by propping up the dictators in exchange for the dictators kicking back billions is a form of welfare in america the other thing sweeping the world is freak weather let's talk about freak weather we're seeing a once in a thousand year flood and quote droughts droughts and storms every month it seems what sort of impact will require they're going to have on the equity markets and on the bond markets going forward joshua brown well max investors have gone absolutely crazy for commodities especially the agricultural variety over the last couple of months you basically seeing dislocations in every single one of them i'll give you a couple of for instances you're seeing cotton at a civil war era i you're seeing sugar at new highs all the time we eat. obviously
very affected by the fires and droughts last spring and summer i think you'll see that again this year if this these weather patterns continue so you see equity investors pile into investments that are lever to higher agricultural commodity prices well you used the word dislocation but what's being dislocated here the markets being dislocated or are they just performing their normal price discovery mechanism while the nature itself the ecosystem the global it go system due to the ravages of industrialization has become dislocated to which is that which came first the chicken or the egg here what's really being dislocated the environment the ecosystem or the economy yeah max i think we can have a little from column a in a little from column b. i think to a large part there are demand issues that or a completely new paradigm i hate saying this you know this time it's different all of us in the investment business we vile that phrase but if you look at where the demand is coming from you're seeing it from parts of the world where ten years ago
would not even be in the discussion you also have a monetary policy which i know is a big topic on your show there's without a doubt you have a lot of free loose cash chasing commodities of all stripes as a result of that and then you have the regular kind of supply disruptions like what i referenced with what went on with russia with the wheat crop you're seeing that australia was sugar that's going to happen regardless there are some weather phenomenons though taking place right now like el nino that do exacerbate those kind of dislocation so i think it's like a combination yammered that the demand in suddenly triple population has been going up and not that much the it's a supply issue the supply of cheap money or supply of quantitative easing and that's giving the speculators a free pass to speculate and drive these prices higher and then when prices go against them they get bailed out with more quantitative easing so who's going to stand up to the real. air ben bernanke i actually think that there are some things
being done in commodity markets that are positive. number one position limits sizing number two reserve requirements being raised number three changes in margin policy i think there is a recognition amongst the futures regulators in exchanges that left unchecked we could be back at one hundred fifty dollar oil and we could start having people play games with some of the narrower commodities to make life difficult for the industrial economy that actually wants to build and produce things so it's not all bad i think higher prices this time i'm going to result in a little bit of sanity and. not necessarily overwrought regulation but a sense that there do have to be some grown ups around the exchanges before things get out of control but every time they raise margin requirements or raise position limits bernanke you just raises the quantitative easing so you know he's got his
fingers on the controls he can keep raising these things by grillings of dollars let me ask you something he was on sixty minutes recently he said that while the problem with all this money we're creating within fifteen minutes i can reverse direction and saw that act all this money from the economy but is there like a porcupine joshua brown all this money easing it goes in easy but if you try to pull it out the same way it came in you've got a lot of pain in the bond market is me is it correct to think that to say that it can reverse course in fifteen minutes or is he speaking you know out of his hat it's a put it mildly max since september i've been one of the charter members in the blogosphere at least of the one percenters i would love to see a rate hike if only you know from zero to one percent is not a huge change in what it does the economy but i would like to see how the markets the capital markets withstand that both on the bond and the stock side i think you
would. absolutely get some kind of a shock some kind of a selloff at first but i think we can get to that level where we're out of emergency mode whether or not we can really choke off commodity speculation with interest rates is yet to be seen and as you know certainly i agree with your point it's not going to be as easy as he says flipping the switch in fifteen minutes and making an adjustment while the other thing is that what he's done there by keeping rates so low to help us speculating banking buddies is he's penalized everyone who's got money in a savings account the workers the people in this arm and there are subsidizing a goldman sachs bonuses j.p. morgan bonuses coming out of grandma's pocket it's come out of grandpa's pocket to pay these young bucks on wall street you know and we know that they're all on drugs so you know grandma group are subsidizing wall street's drug habit that's not fair now let's talk about this speaking of freaks the united states but the u.s.d.a. department of agriculture last week overturned a court order banning monsanto genetically modified sugar beet seeds. i don't know
him well in this one but monsanto controls ninety five percent of the sugar beet seed market that's not a commodity market that's a monopoly position fifty percent of the entire market that's not economics that's soviet era monopoly position how did this happen the way it happens is that you've got a situation where they were more worried about a sugar. sugar crisis a shortage crisis than they are about the negative ramifications of genetically modified seeds it just so happens that monsanto is that player they are that size the agricultural subsidies the higher you see agricultural commodity prices rise the bigger the profit margins the more of a joke they begin to look like for you know from a corporate standpoint you're talking about companies that are defacto the biggest welfare queens in the country and now they're starting to see in order to an amount
of demand for their products i don't know how much longer the subsidies last i know it's very tough to get through the political process in the midwest without at the very least keep your mouth shut about them but it's goes beyond just being anti american in terms of monsanto by monopolizing the sugar beet mark in the sugar market by holding the sugar market ran one is no corn is no better than the letter k. we're talking about a company here monsanto that's the stuff that like they try to corner in a market they have they have fiddled with the underlying ecology and genetic make up of the food crops that have been around for one hundred two hundred thousand years you know since humans have been organizing food crops let's call it twelve thousand years you know the beginning of agriculture now in the last fifty years monsanto comes around it goes beyond being anti american they're actually being anti god i mean monsanto is the devil incarnate they believe that they.
mission statement takes precedence over god i mean who. going to take these what you know what's up with this company there's a long history of this kind of stuff and while not being a proponent of it i certainly look for ways to capitalize on it i know it's not the direction we want to go but let's keep in mind the sugar beet dependence stems from the eighteen hundreds when cane sugar become became too costly to ship into other parts of the country we also had shenanigans the reason hawaii became a state was in part for some of the access to sugar that the exports there were offering so i think monsanto was only the last in a long line of companies that have sought to use an agricultural advantage for their political aims and profit aims now let's talk about we learned the unemployment numbers are looking good quote unquote are they really looking good joshua brown are could the government numbers just be a form of what we might call financial propaganda n.f.p.a.
is one of the noisiest sloppiest reports we get it's very tough to take it with a without a growing assault because you know there's a revision right around the bend i think you six is a much more important measure to look at and you six is still wildly the area alone in science or circles are let me interrupt for a second just break down and f.p. for those who are not aware of this and you six for those who are not in non-farm payrolls ok right non-farm payrolls is basically the predominant study put out on the jobs rate the employment rate by the bureau of labor statistics the other measure that i cited you six is under employment and you take into account people that are working part time jobs that want to be full time you're talking about people that are doing the job which is not the job that they want to do temporary help things of that nature and. is not budging the way the headline number seems to be gradually budging on on unemployment claims so i think the numbers are
a really noisy it's tough to really. say with a straight face this is an improvement well we can say though things are not getting worse and i know that's kind of like. it's an easy way to tout improvement but you know you have to keep in mind things were so bad for so long that just assists in layoffs for example you can kind of look at it from a positive standpoint we know what the damage has been and what will be all right well you say there's a lot of noise in the numbers let's look at what david stockman recently said on another network he said look ten years ago there was one hundred thirty six million people with jobs in america today ten years later one hundred thirty six million people with jobs and as many job growth and well years i mean that's a simple number at the administration to say there's been no job growth at all in ten years and yet we've made a lot of people on wall street very very rich by jiggling the numbers by falsifying the numbers we know that the nine percent unemployment number they just reported doesn't include people stop looking for work what kind of number is that i mean one
of them just it's an insult but you know that you know the story there i think most people know that those numbers are worthless the dow jones has moved in ten years either that's correct there hasn't been anywhere at eleven thousand and right the only only gainer here of any note has been of course gold and silver as a money manager i've been in the gold and silver player these last ten years joshua brown i've been in them along with everyone else i'm not religious about them but i recognize the need for investors to have some allocation toward the precious metals . i'm actually i've been we jiggering the way i'm doing that i'm coming out of the large cap miners they've been a huge disappointment instead of allowing higher prices to boost profits and share prices they've decided to enrich themselves and do secondary offerings and so i'm looking more toward the metals themselves than any of the delivery of plays right now but yeah yeah finally i did want to ask you on china the china story here. is
it overhyped it where are we in the china story. in your view of things joshua brown china scares me i'm watching chinese p.m.i. now two months of purchasing managers index now down to munch straight not a trend yet but a third month what are we going to say in the mean time all the industrial and base metal commodities are skyrocketing still copper afresh high this morning as though there's no possible way you're going to get any kind of building slow down there china is the largest purchaser of copper in the world by the way so i think that people or not expecting any kind of slowdown in china and that surprises me because the data is starting to point toward one all right joshua brown thanks so much again for being on the kaiser report thank you max thanks for having me and that's going to do it for this edition of the kaiser report with me max kaiser and states that have written to thank my guest joshua browne if you want to send me an e-mail please do so at kaiser reported r t t v are you until next time this is max keiser saying.